ECONOMIC TIES, INFLUENCE, AND TAIWAN-MAINLAND CHINA RELATIONS

Economic contacts between Taiwan and the Chinese mainland, long nonexistent, have recently undergone a dramatic expansion. A primary problem facing both governments is that no one knows for certain what, if any, impact the growing economic relationship will have on the political relationship between Taiwan and mainland China or on the relationship each government hay with other countries. This paper presents a formal model that may prove useful for analyzing this problem. In particular, the model focuses on the strategy of issue linkages and seeks to determine whether linking political and economic issues can prove beneficial to both sides and contribute to a speedy resolution of the situation. Results derived from the model suggest that issue linkage can be a useful strategy, but that any final solution will depend partially on, the order in which the issues are resolved. This leads to the expectation that any progress toward greater cooperation will be slow, as each side will be reluctant to provide the other with significant agenda-related advantages.